Overview of Billing Schedule

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The Billing Schedule feature provides you the capability and flexibility to bill your customers based on contract negotiations or project milestones. Use this feature to generate invoices based on predefined invoicing dates and amounts.

You can customize invoicing dates that do not follow standard billing frequencies such as monthly, quarterly, or annually.
You can define invoicing amounts that vary based on certain criteria.

Without the Billing Schedule feature, you have to use standard billing schedules to bill customers with fixed amounts based on a regular billing period, such as monthly, quarterly, or annually. With this feature, you can bill subscriptions on customized schedules instead of regular schedules, and then automatically generate invoices for the subscriptions based on configured invoice schedules.

For example, you want to generate four invoices for a subscription with a term of 12 months and a total amount of $12,000. Without the Billing Schedule feature, you might have to bill $3,000 quarterly in each invoice on the first day of January, April, July, and October. With this feature, you can flexibly bill $3,000 in the first invoice on February 3, $4,000 in the second invoice on July 12, $3,000 in the second invoice on October 20, and the remaining $2,000 in the fourth invoice on November 28.

Feature availability

The Flexible Billing functionality comprises the Flexible Billing Attributes and Billing Schedule features. The functionality is unavailable for the Growth edition and the Bronze module. For pricing information, see Zuora Editions and Zuora Modules.

The Flexible Billing Attributes feature is generally available and has been enabled for all customers in Sandbox environments. If you want to enable this feature in your Production environments, contact your Zuora Customer Success Manager for assistance.
The Billing Schedule feature is in the Early Adopter phase. We are actively soliciting feedback from a small set of early adopters before releasing it as generally available. You must have the Orders or Orders Harmonization feature enabled to enable this feature. You can do it with the self-serve interface. For more information, see Enable billing features by yourself .

Key concepts

To get an overall understanding of the Billing Schedule feature, keep the following key concepts in mind:

Invoice schedule
An invoice schedule consists of one or more invoice schedule items that can be picked up by ad hoc bill runs, which are hourly scheduled by Zuora. Each invoice schedule item can trigger an invoice generation process. You can specify the triggering date when an invoice is generated, and specify the amount to be billed in each invoice.
Invoice schedule item
An invoice schedule item contains information that is needed for triggering an invoice generation process. Each invoice schedule item is picked up and triggered by an ad hoc bill run on the scheduled date to generate an invoice with the scheduled amount.

For information on how to start using this feature, see Get started with Billing Schedule.

Invoice generation rules in Billing Schedule

You have the flexibility to create invoice schedules involving one single year or spanning multiple years. The invoice generation rules might vary for invoice schedules with different terms.

Invoice amount allocation to invoice items

During the invoice generation process, the amount allocated to invoice items follows the following rules:

The invoice amount is allocated to invoice items based on the annual price.
For multiple charges contained in different subscriptions, charges are consumed in sequential order by charge start date. The charges with the same start date are consumed together and are billed proportionally into the scheduled invoices.
For a specific use case, see Create single-year invoice schedules for charges with different start dates and end dates within one term.
The total billed amount sums to the total amount of the selling price for each individual charge.

The amount allocated to each invoice item is calculated based on the following formula:

(Billed invoice amount ÷ Total invoice amount) × Selling price

For a specific use case, see Create single-year invoice schedules on new subscriptions with the same term.

Service period determination on invoice items

During the invoice generation process, the service period of each invoice item is determined by the charge amount that is billed in the invoice, calculated in the following formula:

(Invoice item amount ÷ Selling price) × Number of months in the subscription term

The calculation of the service period is determined by month first, and then by day. The calculated result rounds the date up because a portion of that day is consumed.

The calculation of days depends on the option selected for the When prorating a month, assume 30 days in a month or use actual days? billing rule.

To use the actual number of days in the month of a proration, select Use actual number of days.
To always use thirty days in a month for a proration, select Assume 30 days in a month.

Assume that the calculated service period is 6.7 months indicating 6 months plus 0.7 months, and the charge start date is 01/01/2022.

If the Use actual number of days option is selected, the number of calculated days is actually 21.7 days, the calculation result of 0.7 * 31 days. A portion of 07/22/2022 is consumed, so the service period is set to be 01/01/2022 to 07/22/2022.
If the Assume 30 days in a month option is selected, the number of calculated days is actually 21 days, the calculation result of 0.7 * 30 days. Then, the service period is set to be 01/01/2022 to 07/21/2022.

Credit memo generation in Billing Schedule

After an invoice schedule is created for an order, if you cancel a subscription or remove a charge, credit memos are generated automatically for the change.

If a charge is removed or a subscription is canceled, a credit memo is generated automatically on the date when the removal or cancellation takes effect to generate credit memos. If the charge for subscription is associated with an invoice schedule that has pending schedule items, the next invoice schedule item in Pending status is automatically processed on the date when the removal or cancellation takes effect.
If multiple charges are removed or multiple subscriptions are canceled, a credit memo is automatically generated on the earliest date when any removal or cancellation takes effect.
If a subscription contains invoice schedule charges and non-scheduled charges, the credit memo is generated along with the next invoice.

Invoice generation approaches in Billing Schedule

The following table lists the approaches to generating invoices and their compatibility with the Billing Schedule feature.

Invoice generation approach	Compatibility with the Billing Schedule feature
Billing Schedule	With the Billing Schedule feature, Zuora Scheduler automatically generates invoices with specific amounts on predefined dates, and scans any related change every hour. If the dates or amounts of pending invoice schedule items are updated, Zuora Scheduler can pick up the change in the next scan. If the date of an invoice schedule item is updated to the current date in the tenant timezone, the schedule item will be picked up and processed in the next scan. After an invoice schedule is fully processed, if you remove charges or cancel subscriptions associated with the invoice schedule, Zuora Scheduler will automatically generate credit memos in the next scan.
Execute an invoice schedule API operation	You can use the “Execute an invoice schedule” API operation to generate an invoice for a specific invoice schedule item. If you do not specify any invoice schedule item in the request, the next invoice schedule item in Pending status is executed.
UI for invoice schedules	You can use the Zuora UI for invoice schedules to generate an invoice for a specific invoice schedule item. If an invoice schedule is fully processed, and has credit to be generated, you can trigger an ad hoc bill run from the Zuora UI. The ad hoc bill run can generate a credit memo. For more information, see Execute invoice schedules.
UI for creating bill runs Bill Runs API operations	You can use the Zuora UI and REST API to generate invoices for subscriptions associated with invoice schedules by specifying an account or a batch of accounts. Meanwhile, regular subscriptions are also billed
Generate billing documents by account ID API operation	This API operation can work with invoice schedules. If you only specify the account ID, the API operation generates invoices for all the unbilled subscriptions that belong to the account, regardless of whether the subscriptions are associated with invoice schedules. The invoice schedule items with dates earlier than the specified target date are picked up. If you specify a list of subscription IDs in the request, the API operation generates invoices for all the specified subscriptions, regardless of whether the subscriptions are associated with invoice schedules. The invoice schedule items with dates earlier than the specified target date are picked up.
Invoice and collect API operation	You can use the “Invoice and collect” API operation to generate invoices for all the unbilled subscriptions that belong to the account, regardless of whether the subscriptions are associated with invoice schedules. The invoice schedule items with dates earlier than the target date are picked up.
Orders API operations	You can use the following API operations to generate billing documents for the charges that are associated with the corresponding invoice schedule: Create an order Create an order asynchronously Preview an order Preview an order asynchronously
Generate action (not recommended)	You can use the "Generate" action to generate invoices for all the unbilled subscriptions that belong to the account, regardless of whether the subscriptions are associated with invoice schedules. The invoice schedule items with dates earlier than the target date are picked up.

Restrictions and limitations

When using the Billing Schedule feature, keep the following restrictions and limitations in mind:

Item	Restrictions and limitations
Charge types	Only one-time or recurring charges are supported.
Charge settings	For the charges in orders, you must configure the following settings: Set Billing Cycle Type to Charge Trigger Day, Term Start Date, or Term End Date appropriately. Set Billing Period Alignment to Align to Charge, Align to Term Start Date, or Align Term End Date appropriately. If you set Billing Cycle Type to Term Start Date or Term End Date for charges, you cannot change the term start date and term end date for the current term after creating the corresponding invoice schedule.
Orders	Only termed subscriptions are supported. Orders with evergreen subscriptions are not supported. Orders with discount charges are not supported. Orders with usage charges and order line items are supported, but usage charges and order line items are automatically excluded from invoice schedules.
Orders Harmonization	With the Orders Harmonization feature, you can create orders through Orders API operations, and create invoice schedules for orders through the REST API, and change subscriptions through the Amendment UI, the Amend action, or Orders API operations. The Orders UI is not available.
Subscriptions	If you use the Flexible Billing Attributes feature, subscriptions associated with an invoice schedule must have the same billing attributes including bill-to contacts, payment terms, invoice templates, and sequence sets. For more information about the Flexible Billing Attributes feature, see Flexible Billing Attributes.
Billing periods	The billing period of a rate plan charge must be equal to or greater than the term length of the rate plan charge. For example: If the subscription term is 12 months, the billing period of the rate plan charges in the subscription must always be equal to or greater than 12 months. It is not allowed to set the billing period to four months. If the subscription term is 36 months, the billing period of the rate plan charges in the subscription must be equal to or greater than 36 months.
Order actions	Some order actions are not supported in specific scenarios. If the charges in subscriptions created in an order are included in an invoice schedule, the following order actions are not supported for the orders associated with the invoice schedule: Terms And Conditions to extend or shrink the charges Suspend Resume If an invoice schedule has been processed, the following order actions are not supported for the orders associated with the invoice schedule: Cancellation before Future-dated Removals Remove Product before Future-dated Removals Update Product before Future-dated Removals Update Product from the middle of rate plan charges For detailed information about the order actions supported by invoice schedules in different statuses, see Supported order action types.
Data limits	The following data limits exist for the Billing Schedule feature. One invoice schedule can have at most 50 invoice schedule items. One invoice schedule can be associated with at most 10 orders.

Supported order action types

For orders associated with invoice schedules, which types of order actions are supported depends on the status of the associated invoice schedule.

The following table lists the mapping between the types of supported order actions and the status of invoice schedules.

Order action types	Invoice schedule status
Order action types	Pending	Partially Processed	Fully Processed
Creating a subscription	✅	✅	✅
Adding a product to a subscription Note that new products will not be included in the existing invoice schedule.	✅	✅	✅
Removing a product from a subscription	✅	✅	✅
Updating a product from the beginning of a rate plan charge	✅	🚫	🚫
Updating the price, including the unit price and quantity, from the middle of a rate plan charge	🚫	🚫	🚫
Updating custom fields from the middle of a rate plan charge Note that the contract effective date must fall into the unbilled service period. If you want to update custom fields for a billed period, you must first reverse the invoices previously generated during the period.	✅	✅	🚫
Canceling a subscription	✅	✅	✅
Changing the owner of a subscription Note that all the subscriptions in an invoice schedule must be transferred together.	✅	✅	✅
Renewing a subscription Note that you must enable the Splitting Segments setting.	✅	✅	✅
Early renewals, covering the Remove Product, Add Product, and Update Terms and Conditions order actions	✅	✅	✅
Updating the terms and conditions but not extending recurring charges	✅	✅	✅
Extending recurring charges through the Update Terms and Conditions order action	🚫	🚫	🚫
Removing a product before a future-dated removal	✅	🚫	🚫
Cancelling a subscription before a future-dated removal	✅	🚫	🚫
Updating a product before a future-dated removal Note that you can update a rate plan charge from the beginning.	✅	🚫	🚫
Suspending or resuming a subscription	🚫	🚫	🚫